Australia: Growth pensions go aggressive

Article date: 1 September 2004

Navigator today announced the launch of two growth pensions,available in the market from September 20. They will save manyretirees thousands of dollars and have better options and moreflexibility than other competing products released to date. Theyare the Navigator Super Solutions Growth Pension and NavigatorPersonal Retirement Plan Growth Pension.

General manager products for Navigator, Tim Cobb, says thesepensions will help "mum and dad" investors keep control of theirinvestments without losing entitlement to the age pension and thepensioner concession card.

Navigator Super Solutions Growth Pension combines all thebenefits of a growth pension with the unique benefit of capitalprotection security on selected investments. This means evenrisk averse investors can access the benefits of investing ingrowth assets with the reassurance of knowing they havesecurity.

Navigator Personal Retirement Plan Growth Pension has over 160boutique and mainstream investments options and isalso a highly effective alternative to DIY funds.

"Growth pensions are a new breed of product allowing retireesand pre-retirees to take more control of their superannuation moneyand to be eligible for the age pension," said Tim.

They count towards the pension RBL (if at least 50% of totalbenefits are taken as a growth pension) and they are 50% socialsecurity asset test exempt.

The Navigator checklist (below) is for retirees and pre-retireeswho want to know whether growth pensions will help them. Anyoneanswering yes to any of these questions should talk to theirfinancial adviser about the product.

  1. Is the assets test reducing your Centrelink pension?
  2. Is the assets test preventing you getting any pension orconcessions at all?
  3. Do you have more than one allocated pension investments?
  4. Do you have a reasonable benefit limit (RBL) problem?

Until now, many retirees have been forced to invest in lifeoffice annuities to help get access to age pension benefits.However, these products gave low returns and often a term annuitycould be too short, not lasting through retirement.

The introduction of growth pensions will see the new producttreated the same as a complying life annuity for Centrelinkpensions but with the additional benefits of:

  • Option to invest in whole range of growth assets from leadingfund managers therefore appealing to clients looking forperformance
  • Longer terms for couples – those aged 60 can have a termof 30 years, which is likely to last well into retirement.

"Every bit of income during retirement is welcome. The growthpension helps retirees structure their finances in a way which willmaximise any possible income, including the aged pension," saidTim

Case Study:

For example, currently, a couple will still receive some agedpension if they:

  • Own their home
  • Have up to $478,000 in assets (not including own home)
  • Have income from investments up to $2,168.50 a fortnight.

This table is an example of a retired couple’s assets andtheir assessable amounts for the aged pension assets test (assumingthey own their own home).

AssetsValue of assetAssessable amount
Personal belongings$50,000$50,000
Allocated pension$150,000$150,000
Growth pension$400,000$200,000

By using a growth pension, this couple’s assets are underthe assessable amount of $478,000 for the aged pension assets testand may be eligible for a part pension payment, health care card,pensioner concession card and pharmaceutical allowance*. If theyhad used a non-complying investment, they would be $122,000 overthe asset test limit.

Growth pensions are a flexible and attractive alternative totraditional complying annuities and will be available from 20September 2004.

For more information on both of Navigator’s growth pensionproducts and other financial solutions please contact a financialadviser.


* Assessable income from their investments, including theAllocated Pension and Growth Pension must be under $2,168.50 perfortnight to receive part pension and associated benefits.

For further information pleasecontact:
Bernadette Collins
Public Affairs Manager
Aviva Australia
Phone: (03) 9829 8818
Mobile: 0421 686 351

Notes to editors:

  • Aviva Australia is a group of two specialist financialservices companies: Navigator and Norwich Union Life AustraliaLtd. Portfolio Partners, the Australian funds management arm ofAviva plc, is a sister company. Through these companies we provideproducts and services in the areas of wealth creation, wealthmanagement and wealth protection for more than 300,000 customersthroughout Australia
  • Globally, Aviva Australia is part of Aviva plc, theworld’s fifth largest insurance group, the largest insurerin the UK and one of the top five life companies in Europe. Avivawas formed in May 2000 through the global merger of CGU plc andNorwich Union plc
  • Aviva is a leading provider of life and pensions products toEurope and has substantial businesses elsewhere around the world.Its main activities are long-term savings, fund management andgeneral insurance. It has premium income and investment sales fromcontinuing operations of A$78 billion, and more than A$624 billionof assets under management (as at 1 July 2004). The group has morethan 56,000 employees and 30 million customers worldwide
  • The information in this document reflects Navigator AustraliaLimited's ('Navigator’) understanding of existinglegislation, proposed legislation, rulings etc as at the date ofissue. In some cases the information has been provided to us bythird parties. While it is believed the information is accurateand reliable, this is not guaranteed in any way. The informationgiven in this document is of a general nature and has not takeninto account the investment objectives, financial situation orparticular needs of any particular person and it is not asubstitute for professional advice. Applications to invest in afinancial product issued by Navigator, or any of its relatedentities, must be made by completing the application form attachedto the applicable Product Disclosure Statement ("PDS"). A PDS isavailable from Navigator or your financial adviser. Before makingan investment decision on the basis of the information above, aprospective investor needs to consider, with or without theassistance of a professional adviser whether the information isappropriate in the light of their particular investment needs,objectives and financial circumstances.

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